SPECIAL ECONOMIC ZONES IN INDIA: BENEFITED OR NOT?

Abstract

After independence Indian government has adopted Mix economy system, It is public oriented government where public involvement more than private. Five year plans accepted through the government to achieve development and financial gain for economy of India. In year 1965, first EPZ was established in Kandla and then so on, on the other places. Before 90s, government was much afflicted by red tape, rigid customs, inefficiency, delayed procedures, corruption, bureaucracy, and bribe. Government has needed change for development fast so it inclined towards privatization to overcome on these issues. Government was in dilemma to take step forward for foreign investment in India because it was estimated that foreign companies again try to control power in their hands. After 90’s government has been adopted privatization policy for the Indian system and open market system supported by government for investment in economic field. Several public institutions have been privatized or given on the private contractors. This change has provided platform to the investors in India. 

After a decade in year 2000, more opportunities have been emerged in Indian economy and this has been leaded to opening SEZ in India. Special economic zones defines as a region within a country where a country government can attract foreign and domestic business/investors for doing business/investment and government attract them to provide tax free trade, fiscal supports, tariff free trade for some period of time, allowed single window system and other incentives. Success of SEZ in china has motivated to Indian government open SEZ in India. Old EPZ has converted to SEZs through EXIM policy 2000, this scheme  was adopted by government for development and fiscal growth of the country  these has given immensely profited few years  but later on their performances has been coming down. Whatever the reason behind declining rate of income but it is very unpleasant to say that it has not worked up to mark. Declining continuous performances of these zones in their respective fields is concerned issue.  Some fields of SEZ in which India dealing are Software technology IT/IITES, pharmaceutical, multi processing zones, jewels, Gems,  handicrafts, leather and bio-parks. Another problem arises with them, Most of the SEZ companies’ setup in southern states; it means northern and other areas of the country not touched to these zones. It increases imbalances in the economy as well as infrastructure of these places. These zones kept tax free which is revenue loss for the government, land issues also emerged after SEZ act enacted. IT/IITES sector share is more than other sectors which shows ignorance of sectors. 

This paper will be discussing pros and con of SEZ. This paper further analysis of SEZ what was the purpose setting up in India? The main objectives to know Is the Purpose achieved? Or SEZ benefited or not in Indian phenomena?